Kaiser earnings offset by asbestos charges

Realty profits, asbestos liabilities nearly a wash

Hannelore Sudermann - Staff writer

Kaiser Aluminum recently announced that its third-quarter financial results will be helped by about $40 million from the sale of two real estate properties.

But the added income will be offset by a nearly comparable charge related to an increase in asbestos liability.

Quarterly earnings results are scheduled to be released Oct. 25.

Kaiser sold its old headquarters in Pleasanton, Calif. on Sept. 29 for about $50 million in cash.

The company put its 80-acre complex in Pleasanton on the market after moving its administrative, research and development offices to other sites more than a year ago. That sale brought Kaiser a pre-tax gain of $25 million.

The company also added $15 million to its balance sheet for a fully leased office building in Oakland, for which the company was obligated to make up the costs of any vacancies.

"The real estate income that will appear in third-quarter results is an example of our commitment to generate and redeploy cash to create a maximum value," Kaiser CEO and President Ray Milchovich said in a release.

The asbestos charge comes from the company's long-term liability for the hazardous material. Until 1978, Kaiser subsidiaries had used asbestos in making bricks and insulation materials.

Kaiser said it also expects a gain of about $40 million on the sale of electrical power and a charge of between $30 to $40 million in expenses relating to the settlement of the labor dispute with the United Steelworkers of America.

Kaiser union workers in Spokane start going back to the Mead plant Saturday morning. Those at the Trentwood rolling mill begin to return Oct. 23.

As replacement workers leave and union workers return to their jobs Saturday, sheriff's deputies will monitor the transition, but their presence will be strictly "low profile," said Spokane County Sheriff Mark Sterk.

He added that the department's 24-person riot team already was scheduled for training Saturday and could be utilized if any need arises.

Sterk said the Sheriff's Office has incurred about $75,000 of costs in dealing with the two-year labor dispute. He called the amount paltry compared to what might have been spent had the dispute turned violent.

"We didn't have to go and baby-sit," Sterk said.

•Staff writer Mike Roarke contributed to this report.